Check Your Mirrors

URAGUAY gets a car manufacturing plant as a result of deal between Socma SA, one of Argentina’s biggest companies, and China’s Chery Automobile. A total investment of USD $100 million will finance the plant in Uraguay, wit Chery providing 51% of the capital and Socma coming up with the remaining 49% investment needed. Ownership of the manufacturing facility is split in the same fashion. Socma says that 25,000 cars will be produced in the plant annually for the first three years, starting in 2007, and then production will be ramped up to 100,000 units per year. The plant will produce a high-end vehicle called the Tiggo, and a mass-market car called the QQ. Chery currently produces 400,000 vehicles per year and sells those vehicles in 53 countries. If you have never seen one on the road where you live, it won’t be long.

PARKING in New York City isn’t cheap – the average parking space costs $500 a month.

SPORT and utility realized together. I’m talking about the 2006 Saab 9-3 SportCombi, which is a very nice driver, and is capacious to the extreme. I spent some seat time with this wagon recently, and it’s tough to not like this car. Everything inside is laid out in typical Swedish fashion (read: just about perfectly), the seats are great for long distances, the 250 HP turbo V6 is more than willing, the brakes are wonderful, and the handling is precise on the straights, and most importantly, in the corners. The huge cargo area will swallow up just about anything, with enough space to put a lot of SUVs to shame. And this car gets an EPA-rated 28 mpg, courtesy of the excellent 6-speed automatic. It’s funny, in Europe, combis are seen as representative of a youthful, very active lifestyle. Think hang-gliding, hiking, skiing, surfing, etc. Here in the States they’re thought of as mommy-mobiles. Maybe we should go Euro on this one. Forget the big ‘ol honking, gas-sucking SUV – this is the real sport/utility vehicle.

ACCORDING to AutoCount, an Experian subsidiary, the top ten auto finance companies so far in 2006 are:
GMAC
Ford Motor Credit N.A.
Toyota Financial Services
DaimlerChrysler Financial Services
American Honda Finance
Chase Auto Finance
Nissan Infiniti Financial Services
WFS Financial
Wells Fargo Auto Finance
CitiFinancial Auto

FORD tried to buy the combined Austin-Rover in 1986, if you can believe it. And they would have bought it, too, because Austin-Rover wished to be acquired, but the British government in power at the time vetoed the acquisition at the last hour. This is probably akin to the feeling of being angry at missing your train, only to see on the news later that it went off the tracks and burned to a cinder.

IRAN has announced that Iran Khodro, the Middle East’s largest carmaker, plans to set up an auto production facility in Senegal. The plant will produce the Samand, the national car of Iran, a vehicle based on the Puegeot 405 that debuted worldwide in the early Nineties. It was only last year that the Samand replaced the Paykan on the production line in Iran. The Paykan was built for decades in Iran, and was based on the ancient Hillman Hunter, which was built in England in the Sixties and early Seventies. The Senegal factory will produce up to 10,000 units annually starting in 2008, and joint ownership of the facility will be apportioned as follows through the new SenIran Auto company: 60% owned by Iran Khodro, 20% owned by the Sengalese state, and the remaining 20% owned by a consortium of private investors. Iran Khodro states that the Samand is a much more advanced car than the Paykan, and in what must be considered a statement of the staggeringly obvious, said that it shares none of the Paykan’s parts. A statement on Iran Khodro’s website claims that the Samand has features like seat belts for all passengers, mirrors on both sides of the car, and an AM-FM cassette player.

SCOUTS were made by International Harvester from 1961 until 1980. The Scout was a short-wheelbase rugged-use vehicle built as a competitor to the Willys (later AMC) Jeep. The I-H Scout was much beloved by its owners, with an extremely strong brand image, and many people considered it to be a tougher vehicle than the Jeep, with Scout sales exceeding all Jeep sales throughout the Sixties. And a 1977 I-H Scout finished first in the 4WD Production Class in the Baja 1000, a grueling off-road race through Mexico, with the closest finishing Jeep coming across the finish line over 2 hours later. Available in 2WD and (mostly) 4WD, the Scouts came with four-cylinder engines, then sixes and eights, with the four cylinder option making a comeback in the fuel-crisis Seventies. Even a diesel engine (sourced from Nissan) was available in its last years. It was for naught as I-H made the decision to end production in the 1980 model year, citing low sales figures, and their belief that the market for these types of vehicles was slowly disappearing in the face of high fuel prices. If only they could have seen the near future, but of course, they couldn’t. Chrysler bought the rights to the Scout model name a couple of years ago, but hasn’t slapped it on anything. Yet.

BUICK sold more cars in China last month than it sold in the United States. That’s the first time it’s ever happened and it marks a milestone for Buick and GM. General Motors must be feeling the ground shift underneath them in Detroit. Many Americans are not aware that Buicks are extremely popular in China, and in fact, Buick is considered a premium brand. Buick sales increase in China every month while the brand continues to struggle here in its home market.

GOOD news if you’re in your seventies or you’re in the livery business – Ford has reversed its earlier decision to stop production of the Lincoln Town Car in 2007. Instead, Ford will move production of the vehicle to another plant and keep producing the antediluvian sedan for the foreseeable future.

CHINA had over 100 companies classified as automobile manufacturers at the start of 2006. The Chinese government is itself unsure how many companies are currently engaged in making vehicles, with some companies making as few as 50 vehicles a year, and classified on the government books as another type of manufacturing concern, i.e., bicycles, motorcycles, or even something as unrelated as washers and dryers.

THE average vehicle installment loan in the United States is now a 72-78 month loan term. In 1999, only 21 percent of new-vehicle loans were longer than 60 months, the Consumer Bankers Association says. The trend looks unstoppable with many lenders now offering 84-month loans for those who want even longer-term loans, and many of those same lenders considering adding 96-month loans to their product lineup. What does this mean in practical terms for consumers? Here’s an example: A $20,000 vehicle loan at 7.55 percent simple interest for 48 months costs the buyer $7,025 in interest. The same loan, carried over 84 months, at the same rate, costs $13,871 in interest. You can do the math – that’s almost twice as much in finance costs. And at 15,000 (average annual miles in the U.S.) miles a year, that means you have 105,000 miles on the car when you finish paying it off at 84 months (7 years x 15,000 miles), so then it’s probably time to buy a new car.

1960 saw the introduction of Chrysler’s famous Slant Six engine in the Plymouth Valiant with a gross horsepower rating of 101 ponies. The straight-sixes the company used before 1960 were awful, and Chrysler needed another engine for the happening Sixties. The development engineers leaned the engine 30 degrees to the right, leaned the transmission 30 degrees to the left, and were able to get an approximately even weight balance in this fashion, hence the “Slant Six” name. The 170 cubic inch (round off to 3 litres) production design had extremely large main bearings which meant very low engine stressing, and the Slant Six started setting testing records in performance and durability right away. These results were mirrored in the customer population, with the Slant Six getting a reputation as being an engine that you couldn’t kill, even if you abused it. Ordinary citizens would run their engines up to 200,000, 300,000 miles with regularity. And by Sixties standards it got pretty good fuel mileage as well. Increasing the size of the engine to 225 cubic inches did nothing to decrease its longevity. One thing it couldn’t do, however, was run clean enough to pass modern emissions standards. The last Slant Sixes were produced in the early 90’s for commercial vehicle use.

IN a survey of 1000 adult drivers done by Response Insurance recently, 57% of drivers in the U.S. admitted that they do not use their turn signals when changing lanes. You probably didn’t need a survey to tell you that, but here are some other interesting results from the same survey. About 7% of the drivers that eschew their turn signals say they do so because it makes driving “more exciting”. Approximately 42% of the drivers that don’t use signals state that they’re too pressed for time to use their signals, with another 23% owning up to the fact that they’re just too lazy to flick that turn signal stalk up or down. About 17% don’t use their turn signals because they’re afraid they won’t remember to turn it off (Welcome to Florida – Enjoy Your Stay!), and get this; 11% say they’re much too busy changing lanes frequently to bother with signaling. I’m pretty sure I see that guy every evening on my way home. The survey also noted that 62% of men change lanes without signaling, while only 53% of women admit to doing so. The survey has a margin of error of approximately 3%.

HYUNDAI has really done a great job with the new Sonata LX. The Sonata is finally ready for prime time. I freely admit to being one of those people that heaped scorn upon Hyundai when their cars first showed up in the United States in the mid-80’s, and I never passed up an opportunity in subsequent years to dog them some more. But facts are stubborn things, and the facts are that Hyundai makes some very nice iron now and at very competitive prices. The Hyundai lineup is strong all the way through, and deserves a look from anyone in the market for a new car. Mea Culpa.

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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